All around Cleveland, foreclosed properties are being torn down, rebuilt, or used for other purposes. This is an excellent video to see what Cleveland neighborhoods are doing to fight the aftermath of foreclosure.

Some of the biggest banks in the United States are about to settle state and federal claims over faulty, and fraudulent foreclosures. The target date for the settlement with Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial is Wednesday, July 13, 2011.

The settlement is expected to exceed $20 billion, forming state and federal funds to provide relief to mortgage borrowers. The case has been focused on how banks treated customers during the rise in mortgage defaults. This case is just one in many cases regarding issues of negligent, faulty, and possibly criminal activity related to mortgage and foreclosures.

Some of the issues that are related include compensating people whose homes were improperly seized. Other issues include the institution of funds for states including Ohio to resolve civil mortgage complaints as well as a separate federal account that would require them to provide a specific amount of mortgage relief to borrowers.

I will be thrilled when this is settled as it is just one more piece of the puzzle that we need to put the Ohio economy back on track, but I am sure that whether they meet the deadline of Wednesday or not, we will be hearing about this topic for quite some time to come.

Ohio has been caught up in another case involving JPMorgan Chase which affects our economy and the ability for the state and local municipalities to create jobs and income for Ohio residents. JPMorgan Chase is going to pay out in total $211 million, a number that is so high I can’t even imagine what that amount is, after admitting that one of its divisions rigged dozens of bidding competitions to win business from state and local governments. Unbelievable!

Bid rigging means that the bidder has a chance to see competitors bids before the final bid is cast, giving the bidder an unfair advantage on the bid. Why is this bad for states?

Banks help municipalities invest the money they raise from bond offerings to earn interest before they use the money for various projects. Competition allows the municipality to earn the best yield possible. By bid rigging, the competition is not real, and it denies the municipality the best yield resulting in less income earned.

Complaints were filed by the SEC, the IRS, bank regulators and state attorneys general. Part of the money is paying off a civil fraud charges. From this amount of money, Ohio will receive $1.2 million, and the City of Cleveland, the Columbus Regional Airport Authority, and the Ohio Public Facilities Commission will also receive money. Just one more case of the big banks taking money out of taxpayers pockets that has contributed to the economic recession.

One of the largest impacts on the economic recovery of states including Ohio are the new stricter rules governing government mortgage agencies like Fannie Mae and Freddie Mac. Many people who would have fit the borrowing criteria 5 years ago to buy a home in Ohio are no longer considered qualified by the much stricter new rules.

This affects both the buyer and the seller in both ends of a deal in selling homes, whether they are Ohio foreclosure homes, or just regular homes for sale. Sellers who are selling homes at a fraction of what they paid for them, are not even able to get a buyer approved to pay for that amount. Buyers who normally would have qualified for a loan through a mortgage lender, are not being approved even if they have good credit. Their circumstances are just not good enough.

This causes a huge delay in the Ohio economic recovery that we all need to get back to better paying jobs and also to get back on the road to a more prosperous future. Many of the government policies, meant to help, are just acting in conflict with each other.

Believe it or not, there are a record number of people who want to buy homes in Ohio. However, more than usual are being turned down for mortgage loans. This is on top of another delay caused by federal, state, and local investigations into “fraudclosure” or mismanaged or criminal neglect and oversight of foreclosure practices in several banks and banking contractors. And no matter who is to blame, the Obama sponsored loan modification program has fallen short of goals.

“Giving out unsupportable mortgages was a disaster, and now the danger is overreacting and making the standards excessively high,” according to Joseph Stiglitz, a Nobel prize winninng economist and professor at Columbia University in New York.

Banks usually follow the standards that are set by Fannie Mae and Freddie Mac because these are loans that the agencies will then purchase and package into bonds. These companies, along with the Federal Housing Authority back about 90% of loan originations.

Government programs like the Home Affordable Modification Program (HAMP) have mostly helped keep existing home owners out of foreclosure, here in Ohio and elsewhere in the U.S., but they have not had the success rate hoped for by the Obama Administration when the program was begun.

Right now the entire fleet of 50 state attorneys are investigating the banking industry foreclosure practices which is holding up the current batch of foreclosures in the works which may work in some homeowners’ favor, allowing them more time to catch up with their bills.

Due to the large amount of families facing financial crisis due to foreclosure and bankruptcy, Sesame Street has come out with a series of 5 videos to help explain your family’s financial difficulties to your children in a way that won’t frighten them, leading to more issues. Sesame Street calls the series Families Stand Together: Feeling Secure in Tough Times and they also have a website that has other activities and links for families facing job loss, foreclosure, and bankruptcy, or just having to move because of financial issues.

Children are well aware when parents are not happy, are arguing, or are under stress which losing a job or a home definitely qualifies for. As usual, Sesame Street does an excellent job of providing help through characters that your children already trust through their television shows, videos, and books.

Sesame Street – Families Stand Together: Tough Times

I have been closely following the news about the Cuyahoga County Grand Jury Indictment of the Argent Mortgage employees, and frankly, as far as I am concerned, they are just a drop in the bucket of all the fraudulent mortgage activity that had been allowed over the last few years. If this financial crisis had not happened, who knows how much more mortgage fraud would be going on right now.

I find it insulting, to say the least to know that American banks are taking advantage of prospective buyers just so that their employees can earn a few extra bucks, when by their actions they can destroy the lives of numerous desperate families that are already on the edge. Did the banking crisis cause the recession, or did the recession cause the banking crisis? We will most likely never know, however, it is sure that the banking crisis is a factor, if not the cause of the long continuation of the problems facing the American financial system, and several specific states, Ohio being one of the most affected by the current mortgage, foreclosure, and bankruptcy issues.

So many companies in Ohio have had to close, or consolidate, close some of their operations, let people go, or lay people off. These people in turn, then cannot pay their mortgage, and go into foreclosure. It is a never ending cycle, that needs to be fixed for our Ohio economy to get better, and the rest of the country too.

Most families in Ohio are sitting on pins and needles, waiting for the next shoe to drop, hoping and praying that their jobs will stay intact for another few months. I personally would like to see a lot more indictments to companies like Argent, whose employees thought it would be good fun to torment hardworking American families.